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The Change in Brazil



Jonathan Power

April 1st 2004

LONDON - If Brazil has long lived out its personal fantasy as the archetypal relaxed, tolerant and gregarious country with Copacabana beach, the samba, the carnival and a great deal of sexual freedom it is now living out in real time its almost forgotten societal dream, an economic-cum-social revolution.

Brazil has had economic growth before. For the first eighty years of the last century it was the country along with Taiwan with the world's fastest growth rates. Even today after setback after setback it is the world's eighth largest economy.

Yet it has never kept up with its burgeoning population, the inequities of the feudal land system that cast millions into shanty towns and a murder rate that is more akin to a war zone than a normal society. But with a government led by a former lathe worker and union leader, Luiz Inacio Lula da Silva, who is determined to beat the metal of his country into shape as he once did the cars and workers in his Sao Paulo car factory, it has a clear and active agenda- fiscal discipline first, more than ever before, economic growth second, and third, a commitment with the Zero Hunger program, to give everyone three meals a day and a chance to move up.

Brazil once appeared to have everything- a nation of vast dimensions, the size of Europe, bounded by the steamy tropical rain forests of the Amazon to the north, and the cool, temperate, munificent, prairies to the south. No other country in the world offers such geographic contrasts, or probably such an abundance of raw materials and raw opportunities. For the best part of four centuries too much of this has been squandered- the Amazon raped, the poor exploited and the rich indulged. At last Brazil has a chance of building a First World society out of its Third World inheritance.


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Lula in political terms is in part a lucky man. His predecessor, the right of centre, two term president, Fernando Henrique Cardoso, laid many of the foundations for future progress. For the first time in living memory Brazil had fiscal discipline and social reform- from a rapid increase in primary education to large scale land redistribution- and made steady progress. But even with a big congressional majority he was stymied on many important issues.

Lula is also unlucky. He can only control congress with an alliance of other parties. And although Brazil has always been different from other Latin countries in having a non ideological and non-violent political climate- the Marxists and terrorists have never made inroads here despite the terrible inequalities- too many politicians are beholden to special interests. They are a broad mix- the self-important, cosseted, slow moving, judiciary, the powerful landed class, an inept and often brutal police force, the public sector workers with their 100% state pensions and the well to do students who get a disproportionate share of state handouts whilst working class children are unable to afford a university education.

Lula has a sharply defined no nonsense personality. He has a down to earth, straightforward manner, even though he is a rather shy man who sits fidgety and uncomfortably in the presidential suit and tie. In conversation he shines with one insight after another. His credibility with the Brazilian public is unprecedented in modern Brazilian history. But administration is not his forte and the unmanageability of layers of ossified laws and regulations and the self-interest of the huge Brazilian bureaucracy compounds the problem.

Moreover there is an obvious lack of cohesion in his cabinet. And financial scandal, even although it has not touched Lula personally, has involved a fairly senior figure in his governing circle, and his once whiter-than-thou Workers' Party looks sullied. More serious, are the successful attempts in Congress to water down his pension and judicial reforms.

Nevertheless, a lot is happening and there are a host of large and small scale initiatives underway. The economic team is high class. The economy is beginning to grow and should achieve this year a growth rate of 3.5%. Last year Brazil ran a massive trade surplus, turbo-charged by large Chinese imports.

According to Ciro Gomes, who nearly beat Lula in the election, Brazil could do much better if the international financial institutions could give it more leeway. The inflation targeting imposed on Brazil, he told me, is far too rigid. Western diplomats disagree on inflation but nevertheless accept that the International Monetary Fund should loosen up its straightjacket and allow the government to start spending on the infrastructural and educational improvements the country needs if it is to sharply increase its rate of growth.

Brazil has been savoring its moment of glory with the election just over a year ago of this quite astonishing man. Fantasies and dreams are all very well, but now Lula and Brazil have no choice but hard grind.


I can be reached by phone +44 7785 351172 and e-mail:


Copyright © 2004 By JONATHAN POWER


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